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Since Lifestyle International Holdings Limited (HKG:1212) released its earnings in December 2018, the consensus outlook from analysts appear fairly confident, with earnings expected to grow by 17% in the upcoming year relative to the past 5-year average growth rate of 0.5%. Currently with trailing-twelve-month earnings of HK$1.7b, we can expect this to reach HK$2.0b by 2020. Below is a brief commentary on the longer term outlook the market has for Lifestyle International Holdings. For those interested in more of an analysis of the company, you can research its fundamentals here.
Exciting times ahead?
The longer term expectations from the 6 analysts of 1212 is tilted towards the positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. To understand the overall trajectory of 1212's earnings growth over these next fews years, I've fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.
From the current net income level of HK$1.7b and the final forecast of HK$2.2b by 2022, the annual rate of growth for 1212’s earnings is 8.5%. EPS reaches HK$1.42 in the final year of forecast compared to the current HK$1.08 EPS today. With a current profit margin of 39%, this movement will result in a margin of 44% by 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For Lifestyle International Holdings, I've compiled three important factors you should further examine:
- Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
- Valuation: What is Lifestyle International Holdings worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether Lifestyle International Holdings is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Lifestyle International Holdings? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.